Horsemen's Benevolent and Protective Association

Judge Halts Anti-HISA Suit in Louisiana Pending Outcome of HBPA Case in U.S. Appeals Court

A federal judge has stayed a 14-month-old lawsuit initiated by the states of Louisiana and West Virginia that is trying to wipe out the Horseracing Integrity and Safety Act (HISA) via alleged constitutional violations, ordering the case to be “administratively terminated” until the United States Fifth Circuit Court of Appeals makes a ruling in a separate suit in which the Horsemen's Benevolent and Protective Association (HBPA) is also alleging HISA is unconstitutional.

However, U.S. District Court (Western District of Louisiana) Chief Judge Terry Doughty wrote in his Sept. 14 ruling that, “This Order shall not be considered a dismissal or disposition of this matter,” and that he was halting the case while the Fifth Circuit decision played out “without prejudice to the right of the parties to reopen the proceedings.”

This means the plaintiffs (the two states are joined by the Louisiana racing commission, the Louisiana HBPA, the Louisiana Thoroughbred Breeders Association, West Virginia's racing commission, and five individuals regulated as “covered persons” under HISA) and the defendants (the HISA Authority, the Federal Trade Commission [FTC], plus overseers of both entities) must now await the decision–likely to be issued months from now–that will result from the Fifth Circuit oral arguments scheduled Oct. 4.

In 2 1/2 weeks, the National HBPA and 12 of its affiliates will be trying to prove claims that the 2022 rewrite of the HISA law remains “patently unconstitutional,” and that the Authority overseeing the sport “is basically a private police department” whose sweeping powers equate to “oligarchic tyranny.”

The HISA Authority and the FTC will go into those same arguments backed by a lower court's opinion issued in May that ruled HISA is indeed constitutional, because “Congress cured the unconstitutional aspects of HISA's original approach.”

It's also on the judicial record that the U.S. Court of Appeals for the Sixth Circuit upheld the constitutionality of HISA back in March.

One day prior to Judge Doughty's ruling, Magistrate Judge David Ayo wrote in a report that recommended staying the Louisiana case that the multiple, overlapping anti-HISA lawsuits currently swirling in the court system are clogging federal dockets.

“After an exhaustive review of the landscape of suits challenging the Act, this Court concludes that [an amended complaint the plaintiffs had filed] is the result of deliberate strategy” that equated to “an abuse of procedure and an impermissible use of judicial resources,” Judge Ayo wrote in his Sept. 13 report.

The original lawsuit in this case was filed June 29, 2022, alleging that HISA violates the Fourth, Seventh and Tenth Amendments to the U.S. Constitution, plus the Administrative Procedure Act, which governs the process by which federal agencies develop and issue regulations.

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HBPA On HISA: This Court’s Job Is To Again Tell Congress ‘No’

With oral arguments tentatively scheduled for the first week in October, the National Horsemen's Benevolent and Protective Association (NHBPA) and 12 of its affiliates told the United States Court of Appeals for the Fifth Circuit on Wednesday that the rewritten version of the Horseracing Integrity and Safety Act (HISA) remains “patently unconstitutional,” and that the Authority overseeing the sport “is basically a private police department” whose sweeping powers equate to “oligarchic tyranny.”

As the appellants in a lawsuit that has persisted in the federal court system for more than 27 months, the HBPA plaintiffs were allowed to file the first briefing in a landmark case for the Thoroughbred industry that has been put on an expedited schedule by the Fifth Circuit.

The defendants, who are personnel from the Federal Trade Commission (FTC) and the HISA Authority, have 30 days to craft a reply. They will make their filing knowing that a lower court in Texas has already ruled that an amended version of HISA is constitutionally compliant because it fixed defects that the Fifth Circuit had previously identified. The HISA law has also been upheld as constitutional in a separate lawsuit initiated by different plaintiffs that got validated on appeal to the Sixth Circuit.

In a 72-page brief filed July 5, the HBPA appellants laid out an argument based on the premise that the rewritten HISA statute that got signed into law late in 2022 still doesn't pass the constitutional sniff test.

“This Court has already struck down HISA once before,” the HBPA filing stated. “Then Congress tweaked the law in one respect, giving the FTC a modicum of additional power over the original design. Though it is understandable to desire to applaud 'a productive dialogue' between the branches, this Court's job is not to reward Congress for passing a marginally less unconstitutional law by declaring it constitutional. Laws do not get passing grades for improved effort. Nor is constitutional analysis like horseshoes or hand grenades, where close–or even just slightly closer–is good enough.”

The HBPA filing continued: “This Court's job is to again tell Congress–'No.'”

Central to the HBPA's case is the principle in administrative law that Congress cannot delegate its legislative powers to other entities. In their brief, the horsemen argue that the HISA Authority is a private entity subject to that “private nondelegation” doctrine, and that it is wrong to intentionally grant it powers that evade the safeguards of constitutional design.

“An alternative way to think about private nondelegation is not to ask about the quantity of supervision authorized, but the quality of the powers delegated. This question is not how much surveillance and authority the FTC has, but what type of power the Authority wields,” the HBPA filing stated.

“HISA is directly contrary to the historical understanding of private delegation. Ultimately the corporation is named the Horseracing Integrity and Safety Authority, and not Advisors or Administrators, because its purpose is not to advise the FTC or perform ministerial tasks. Its purpose is to exercise sovereign national authority [and] giving such governmental authority to a private corporation was and remains 'delegation in its most obnoxious form.'”

The HBPA filing put it this way: “The Authority establishes the programs, drafts the rules, makes policy decisions, exercises enforcement discretion, investigates individuals, seizes evidence, prosecutes industry participants, sits in judgment on them, issues sanctions, decides how much it wants to spend, and then decides how much it will take in taxes to fund that spending.

“It does all of this without appointment of its board members by the president, confirmation of those board members by the Senate, appropriation of its funds or authorization of its fees by Congress, review of its investigatory requests by a federal magistrate, or transparency to the industry and the public through accountability laws like the Freedom of Information Act, Federal Advisory Committees Act, or Government in the Sunshine Act.”

The first time the HBPA plaintiffs attempted to challenge the original 2020 version of the HISA statute in federal court, on Mar. 15, 2021, the suit was dismissed more than a year later, on March 31, 2022.

The HBPA plaintiffs then appealed, leading to a Fifth Circuit Court reversal on Nov. 18, 2022, that remanded the case back to the lower court. In the interim, an amended version of HISA got signed into law on Dec. 29, 2022.

On May 4, 2023, the lower court deemed that the new version of HISA was constitutional. The HBPA plaintiffs swiftly filed another appeal back to the Fifth Circuit, which is where the case stands now.

The HBPA filing stated that, “this Court should approach the amended statute with a clean slate and hold it up to the high bar set for a delegation of government power to a private actor, as enunciated in its prior opinion. If this Court does so, it will see that the act again fails. Even as amended, the statute does not give the FTC pervasive surveillance and control over the HISA Authority.”

At a different point in the filing, the HBPA took umbrage with HISA's funding mechanisms.

“The powers to set taxes and spend tax funds are legislative powers. The Authority has the power to tax–it is empowered by HISA to set a mandatory assessment that either states pay, or if states decline to pay, then covered persons must pay directly. This is a tax….These funds are not voluntary or charitable contributions from covered persons and states–these are mandatory, obligatory fees levied by law. Failure to pay them can result in fines and suspension from racing. Once these funds are collected, HISA allows the Authority to spend them without any FTC oversight.”

Enforcement is also constitutionally problematic for the HBPA.

“The Authority has the power to search and inspect 'offices, racetrack facilities, other places of business, books, records, and personal property of covered persons that are used in the care, treatment, training, and racing of covered horses,' to issue subpoenas, to compel truthful and complete answers to inquiries, to undertake urine and blood tests without advance notice, and to exercise 'other investigatory powers of the nature and scope exercised by State racing commissions,' which the Authority has apparently defined to include the power to seize evidence….

“By contrast,” the filing continued, “if the FTC wanted to conduct a search or seize evidence, it would need a warrant from a magistrate. For the Authority to conduct a search or seize evidence, it doesn't even have to let the FTC know, little less secure the advance approval of a federal magistrate. This is an unconstitutional mutation of executive power. The Authority also has the power to hold administrative hearings, weigh evidence, decide guilt, and issue sanctions. These are also executive powers…

“As a result, under the terms of the statute, horsemen are investigated and subpoenaed and their property is seized with zero pre-clearance from a federal official, little less an independent magistrate,” the filing stated.

The HISA and FTC defendants now have the opportunity to file their own brief with the Fifth Circuit Court by Aug. 4.

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Letter to the Industry: Breeders’ Cup: HISA is Common Sense

After a series of high-profile issues jeopardized the very existence of our sport, a wide cross-section of leaders representing all aspects of the industry came together to support legislation to address long-standing safety issues in racing. Our legislators agreed change was needed and passed the bipartisan Horseracing Integrity and Safety Act (HISA), which included provisions for a governing body to oversee its implementation.

The purpose was simple: to address a system that lacked integrity. Before HISA, horsemen endured a dysfunctional state-to-state patchwork of rules which were inconsistently enforced. Thanks to the input of horsemen, owners, breeders, jockeys, racetrack operators, veterinary experts, regulators, and other industry participants across the country, HISA has established a fair, transparent, efficient, and economically sound approach to improving the integrity and safety of the sport. This includes uniform rules and regulations across all states that are in line with international standards, swift adjudication protocols, and a robust anti-doping program and medication controls.

Unfortunately, when presented with this opportunity to finally achieve meaningful reform, certain groups have responded by obstructing the path forward. Rather than offer constructive input, these groups have chosen instead to spread misinformation and drain precious industry resources with costly litigation. Some of those funding the opposition do not even care about racing and are using the debate over HISA as an opportunity to further their own political interests. Enough is enough.

Chief among the offenders is the National Horsemen's Benevolent and Protective Association. For example, the HBPA falsely claims HISA will put small entities out of business due to the costs associated with implementation. In fact, HISA specifically requires that regional differences are considered; accordingly, its governing body is addressing disparities between large and small operations and helping to identify operational efficiencies that will mitigate any increased costs.

The truth is, the HBPA has offered no solution that adequately addresses the full scope of the industry's issues, nor does it have any desire to represent its members who support meaningful reform. This has made us wonder who the HBPA really is, and why they don't want more effective controls on safety and drug use. Many in our industry don't know that the HBPA and its affiliate groups consider anyone who obtains an ownership license to automatically be a “member” of their organization. Instead of offering members the ability to provide input on its decisions, the HBPA's insular leadership has weaponized its industry position to oppose vital reform aimed at protecting the very people it claims it represents.

We urge any HBPA members who have horse racing's best interests at heart to come to the table and engage with HISA's leaders in pursuit of sustainable change. Follow the example of leaders from a variety of organizations, including the Thoroughbred Owners of California, Kentucky Thoroughbred Association, Thoroughbred Horsemen's Association, and the Thoroughbred Owners and Breeders Association. These groups have stepped forward with constructive input and have provided their members with information and support to make the transition to new regulations as seamless as possible.

At the Breeders' Cup, we have seen first-hand the success that comes with investing in safety and integrity measures. Because of the trust we have built, we have attracted top-tier national and international media rights partners, developed relationships with major new corporate partners, achieved record wagering numbers, and experienced a significant increase in international participation. A sport rich in integrity is going to thrive.

Breeders need owners who want to invest in horses. Owners need trainers to turn raw athleticism into speed and endurance. Trainers need jockeys, exercise riders, grooms, farriers, and dedicated veterinarians to help execute their programs and keep their horses safe and healthy. Everyone needs racetracks to provide the stages on which our athletes compete and where fans who love racing can gather to cheer on their favorites. And we all know bettors are the backbone of the business, as their wagering supports racetrack operations and purses. They deserve to bet on races that are fair.

Under HISA, uniform safety and integrity measures will ensure all participants can be part of racing's growth and success. Adjusting to the oversight of a national, independent authority may take time, but traditions must evolve if they want to endure. Although Thoroughbred racing has a long and storied past, it will only have a bright future if we make safety and integrity our top priorities through united reform.

HISA has been put in place to provide an opportunity for the sport not only to survive, but to thrive. If you want to see horse racing carry on for generations to come, please join us as we work together to ensure HISA's successful implementation.

Sincerely,

Barbara Banke , Chairman, Breeders' Cup Limited

Drew Fleming, President and CEO, Breeders' Cup Limited

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14 HBPA Affiliates, 4 Tracks Want in on HISA Lawsuit

Led by 14 affiliates of the Horsemen's Benevolent and Protective Association (HBPA) and four racetracks, an alliance of entities seeking protection from the alleged harms of the Horseracing Integrity and Safety Act Authority (HISA) have asked a federal judge to allow them to participate in an existing lawsuit that claims HISA and the Federal Trade Commission (FTC) violated the Fourth and Seventh Amendments to the U.S. Constitution, plus the process by which federal agencies develop and issue regulations.

On Friday, the anti-HISA parties filed what is known as a “motion to intervene” in United States District Court (Western District of Louisiana). If accepted by the judge, it would grant the petitioners status in the case alongside the lead plaintiffs from the states of Louisiana and West Virginia.

An “intervenor” designation allows outside parties who have a personal stake in the outcome of a civil suit to participate in a case, even if their interests don't align exactly with those of the original plaintiffs.

“[Our] interests will be seriously impaired if Defendants prevail in their effort to enforce the enjoined HISA Rules beyond Louisiana and West Virginia,” the movants wrote in their Aug. 12 court filing. “Intervenors are not adequately represented by the parties to this action. Intervenors therefore respectfully request that this Court grant their motion to intervene as plaintiffs to protect their and their members' interests.

“Specifically, Intervenors seek to ensure that HISA does not kneecap the horseracing industry as a whole or themselves with the implementation and enforcement of defective HISA Rules,” the filing continued.

HISA and the FTC have consistently denied the allegations listed in the underlying June 29 lawsuit, which was filed two days before the federally mandated July 1 start date for HISA's first set of rules.

“Plaintiffs' eleventh-hour challenge to those rules on the eve of the statutory deadline [is an] emergency of their own making,” the defendants wrote in court documents just after the complaint was filed, noting that the plaintiffs waited a full three months after the approval of the rules to challenge them in court as being immediately harmful.

The HBPA affiliates wanting in on the suit are Arizona, Arkansas, Illinois, Iowa, Indiana, Kentucky, Minnesota, Nebraska, Ohio, Oklahoma, Pennsylvania, Washington, Charles Town and Tampa Bay Downs. The Colorado Horse Racing Association, which is that state's statutorily recognized horsemen's group for all racing breeds, also wants to be an intervenor.

Three of the four opting-in racetracks are in Nebraska: Fonner Park, Horsemen's Park, and the recently approved racino that will go by the name Legacy Downs. The fourth is Arizona's Turf Paradise.

The North American Association of Racetrack Veterinarians, plus the state of Oklahoma and its racing commission, round out the list of potential intervenors.

“Intervenors seek to join this action to protect their interests and those of their members or citizens in avoiding severe economic harms to the horseracing industry generally and to Intervenors specifically through the enforcement of HISA Rules that suffer from fatal procedural and substantive defects,” the Aug. 12 filing stated.

“Intervenors further seek intervention to address HISA's exercise of regulatory power against Intervenors and the threat of severe sanctions that HISA is currently imposing on Intervenors,” the filing continued.

“Intervenors interests may not–indeed, will not–be adequately represented by the existing parties because they have a different ultimate objective from the [existing plaintiffs] by covering a different portion of the United States and of the horseracing industry,” the filing stated.

Beyond the states of Louisiana and West Virginia, the Jockeys' Guild and various Louisiana-based “covered persons” under HISA rule are the existing plaintiffs.

Friday's motion to intervene asked for “expedited” consideration. But that might not be possible because aspects of the underlying lawsuit have been appealed to a higher court.

When cases go under appeal, the lower-court judge has limited power to change anything in the underlying case until the appeals process has been completed. The movants in Friday's filing wrote that they recognized that fact.

“Of course, Intervenors understand that though this Court's preliminary injunction order is on appeal to the Fifth Circuit, which partially stayed the injunction pending the outcome of an expedited appeal,” the filing stated. “At a minimum, the Court could hold the motion to intervene in abeyance, pending the resolution of the appeal.”

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